Gold prices hit a one-year low on Friday as tech shares slumped. Spot gold fell 3.5% to $3,880.97 an ounce, while silver dropped to $49. "The sky is falling," said trader Tai Wong. Many investors got worried that AI spending may not deliver returns, causing a sharp market correction.
Synopsis
Gold prices have plummeted to a year-long low, driven by anxiety over AI expenditure trends and declining tech shares. Other precious metals such as silver, platinum, and palladium have similarly seen their values drop sharply. Market experts forecast that precious metals may rebound, particularly if gold stays under $4,000. A decline in demand for silver's industrial and jewelry uses further complicates its market outlook, leaving a persistent downtrend expected.
Gold prices hit a one-year low on Friday while silver, platinum and palladium slid deep into technically oversold territory, as tech shares slumped amid worries that AI spending may not deliver sufficient returns.
Spot gold fell 3.5% to $3,880.97 an ounce by 2:13 p.m. ET (1813 GMT) - its lowest level since October 2025 - while silver dropped 6.5% to $49, breaking below $50 for the first time in 11 months, and palladium slid below $1,000.
US gold futures for December delivery settled 3.3% lower at $3,898.90 per ounce.
"The sky is falling," said independent metals trader Tai Wong. "Metals will not be able to escape the gravity well of a nasty stock correction. Earnings have been the foundation of the AI rally and now that pillar is showing some cracks."
Friday's sharp fall in technology stocks may have led to forced selling of safe-haven assets, such as gold, and margin calls, analysts at Commerzbank said in a note, adding that they expected a recovery in precious metals ahead.
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Gold is down 30% since hitting a record high of $5,595 in January due to bets on interest rates staying higher for longer and is currently under pressure from muted demand in Asia. Analysts, however, say central bank demand tends to strengthen whenever gold is below $4,000.
Meanwhile, the three white precious metals - silver, platinum and palladium - lack the support that gold has received in recent years from purchases by central banks and safe-haven investment demand.
This week's 7% to 9% fall in silver, platinum and palladium, compared with a 2.9% decline in gold, took their Relative Strength Index deeply into the "oversold" zone for the first time in three years, signalling the strength of current bearish momentum.
"What is particularly troublesome for the white metals is that the downturn has been grinding and relentless rather than a sharp spike that is quickly recovered," Wong said.
Silver was increasingly viewed as an industrial growth-dependent commodity. HSBC said industrial and jewellery demand for silver was falling, and it expects an average silver price of $64 per ounce in 2027, down from its average forecast of $71 for silver this year.
To buy a single ounce of gold, one currently needs 79 ounces of silver , the most in 11 months, compared with 46 ounces in January, when silver hit a record high of $122.
From a historical perspective, silver still has room to fall further vs gold: this ratio, according to consultancy Metals Focus, averaged 82 in 2020 to 2025.
Platinum and palladium touched their lowest levels in 13 and 17 months respectively, with palladium slipping below $1,000 an ounce and the gold-platinum ratio climbing to 2.7, the highest since mid-2025.
Platinum was last down 4.2% at $1,425.02, while palladium lost 3% to $976.08 under pressure from worries about auto sector demand.
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